Business Statistics and decisions

making

MEASURES OF CENTRAL TENDENCY

LECTURE 3
Part 1
 MEASURES OF CENTRAL TENDENCY

There are three measures in common using in this chapter.

Any kind of “average” is meant to be an answer to the
question “Where do the data center?” It is thus a measure
of the central location of the data set:-
Mean
Median
Mode

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 The Mean Or Average

The first measure of central location is the usual “average”

that is familiar to everyone. Denoted by 𝑥, It is the sum of
all observations divide by the number of observations.
σ𝑛
𝑖=1 𝑥𝑖
𝑋=
𝑛

Mean of 20, 30, 40 is

(20+30+40)/3 = 30.
The most Defects of the mean is, affected by the
outliers values
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 1- Ungrouped Data

Example1:-
Find the mean for

7,3,4,6,1,6,7,6,5

7 + 3 +4 + 6 + 1 + 6 + 7 + 6 + 5
𝑥= =5
9
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 1- grouped data

If the numbers
Times respectively , the mean is:
𝑥1 , 𝑥2 , 𝑥3 , … 𝑥𝑘 𝑜𝑐𝑐𝑢𝑟𝑠 𝑓1 , 𝑓2 , 𝑓3 , … 𝑓𝑘 respectively

(𝑥1 ∗ 𝑓1 + 𝑥2 ∗ 𝑓2 + 𝑥3 ∗ 𝑓3 + ⋯ + 𝑥𝑘 ∗ 𝑓𝑘 )
𝑥=
𝑓1 + 𝑓2 + ⋯ + 𝑓𝑘

the mean is :-
σ 𝑥𝑖 𝑓𝑖
𝑥= ൘σ 𝑓
𝑖

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 Example 2:-

If 5 ,8 ,6 and 2 occur with frequencies 3 ,2 , 4

and 1 respectively.
o the mean is

5∗3+8∗2+6∗4+2∗1
𝑥= =5.7
3+2+4+1

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 EXAMPLE:-

Frequency Mid points

Class interval 𝑓𝑖 ∗ 𝑥𝑖
𝑓𝑖 𝑥𝑖
6-10 1 8 8
11-15 2 13 26
16-20 3 18 54
21-25 5 23 115
26-30 4 28 112
31-35 3 33 99
36-40 2 38 76
Total 20 490

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 The median:-

It is the middle number in an away of observations

when the number of observations is odd i.e. n+1\2 or
the mean of two middle numbers in the away when
the number of observations is even i.e. n\2 and
(n\2)+1 .

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 Example:

2. Even number of observations

3 6 4 1 6 7 6 5
𝟖 𝟖
and + 𝟏 , its 4 & 5.
𝟐 𝟐
1 3 4 5 6 6 6 7

𝟓+𝟔
= 𝟓. 𝟓
𝟐
1.Odd no of observations

7 3 4 6 1 6 7 6 5

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 Grouped data
• display cumulative frequency distribution
• divide the number of observation to two parts.
• The number below which falls 50% of the observations
and above which falls the other 50%.

σ 𝑓𝑖
( 2 −𝑓𝑏 )
Median = 𝑎 + ∗𝐿
𝑓𝑎 −𝑓𝑏
Where :
a= lower limit of the median interval
fi = total frequency
fa = the frequency after median
fb = the frequency before median
2-10
 Example:-

Cumulative
Class interval Frequency
frequency
20-29 4 4
30-39 8 4+8=12
40-49 17 29
50-59 30 59
60-69 20 79
70-79 15 94
80-89 6 100
Total 100

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 THE MODE
Definitions:-
The value that occurs most often in a data set is
called the mode.

1. Ungrouped data :-
e.g.
7 3 4 6 1 6 7 6 5

The most occurring value is 6

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 Grouped Data:-

we have two formula to calculate mode number one

First method:
𝑓𝑎
𝑚𝑜𝑑𝑒 = 𝑎 + ∗𝐿
𝑓𝑎 + 𝑓𝑏
𝑎= lower limit of the mode interval
𝑓𝑎 = the frequency before F
𝑓�𝑏= the frequency after F
L= length of classes
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 Second method

∆1
𝑚𝑜𝑑𝑒 = 𝑎 + ∗L
∆1 + ∆2
a :lower class limit of model class

Δ𝟏: the difference between the upper frequency and the previous
frequency(𝑭 − 𝒇𝒃).
Δ𝟐: the difference between the upper frequency and the frequency
after (𝑭 − 𝒇𝒂).

Note: the second formula is more accurate than the first

because it depend on the direct differences between the
frequencies
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 Class interval Frequency
20-29 4
30-39 7
40-49 25
50-59 30
60-69 20
70-79 9
80-89 5
Total 100

by using two formulas find the mode.

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